The UK is at risk of a ‘lost decade’ of housebuilding unless the development industry is reformed, a think-tank has warned.
In a new report, the Institute for Public Policy and Research (IPPR) warns that the past two British house building recessions, starting in 1974 and 1990, both resulted in a ‘lost decade’ for housing output. It says there are good reasons to believe the current trajectory of the building sector is “following a similar path to deliver another lost decade for market housing output”.
The IPPR says we currently have a housing industry which looks to make large incomes off small volumes of houses. To stop this, it says, the development process needs to be split in two; ‘on one hand land trading and on the other housing building’.
It says if things don’t change housebuilders are likely to use the money, land and guarantees – laid down in the Government’s Housing Strategy – not to build more homes but to build homes in different places.
The report says: “There is a real danger that existing UK housebuilders will merely use building on public land to displace activity from less viable market sites, leading to no net increase in output.”
It says the strategy – which includes plans to guarantee mortgages and release public land on a ‘build now pay later bases’ – could lead to ‘subsidy stagnation’ unless the Government demands more bang for taxpayers’ buck from housebulders.
The IPPR wants conditions put in place on housebuilders bidding for public land where strict build-out times are specified and new entrants targeted in the bidding process.
In addition, it wants all landownership and land sales to be registered with the Land Registry – currently, only 75% is.
It also called for public land to be allocated for self-builders and for the Government to crack on with its previously announced land auctions initiative as a way of making land prices more competitive.